Regardless of the strong demand for properties, it is extremely common for a number of properties to pass in at auction. This could be as a result of a number things, like unrealistic price expectations, insignificant interest in the property, the timing of an auction and many other reasons. Nevertheless, it doesn’t mean the property is a disaster.
Figures have shown that in Melbourne, roughly 15 to 20% of total auctions pass in each weekend. Whilst a number of properties sell soon after the auction, it is quite common for the property to be listed for a private sale.
Regardless whether you are a seller or a buyer, it can be formidable to negotiate on a price of a property that has not sold at auction.
Luckily, if you are a potential buyer of the passed in property, you are sitting in the throne to negotiate, and if you are the seller, then you are close to closing a deal on the property. However, remember that at this point of time neither the buyer or seller has the better of the other, which comes back to the main question – what price should the buyer put forward and what price should the seller accept?
Many of us will say – why don’t we pay for what the property is actually worth? However, the fair market value of a property can be expresses as the agreed price between the buyer’s willingness to pay and the seller’s willingness to pay, which will eventually result in an equilibrium price.
Many psychological factors come into play when selling and buying a property, which could potential affect an individual’s ability to negotiate and act rational, in order to secure the perfect deal.
It has been said that sellers hold greater value to things that they own. This can obviously be a problem when trying to negotiate a reasonable price with a seller. Correspondingly, buyers also face similar pressures when negotiating. It has also been said that if you try to negotiate too hard the seller will consider walking away from negotiation, however if you don’t negotiate hard enough it may result in overpaying for a property. The emotions of a buyer and seller can severely impact the decisions you make, causing a negotiation breakdown.
To overcome these problems for a buyer and a seller, it is highly recommended that research is undertaken, on the suburbs and the particular property. Buyers Advocate offer services to undertake research on a property, and offer a market value on a property, which is often extremely accurate. Wise Real Estate Advice, take on a number of strategies to build an accurate and evidence based report in order to negotiate on behalf of a person to try and secure the best property, whether it is at auction or a private sale.